Port-Harcourt-based oil and gas servicing firm, Eastline Energy Resources Limited, has taken legal action against Conoil Producing Limited, accusing the company of failing to pay a debt amounting to $774,789. In a letter dated June 14, addressed to several parties including Femi Gbajabiamila, the President’s Chief of Staff, as well as members of staff of Conoil and the Nigerian National Petroleum Company Limited, Eastline Energy Resources expressed its intention to pursue a class action lawsuit against Conoil, with the case being filed in the United States.
The letter, signed by Obioma Chimechefulem, the Chief Executive Officer of Eastline Energy Resources, labeled Conoil Producing Limited as one of the most notorious bad actors in Nigeria’s oil and gas industry. It alleged that Conoil had deliberately refused to honor its financial obligations for services rendered by Eastline Energy Resources on some of its oil and gas assets.
According to the letter, Eastline Energy Resources worked for Conoil at its OML 59 & OML 150 oil fields and completed the jobs satisfactorily. However, Conoil has repeatedly avoided making the required payment of $774,789. The letter further claimed that Conoil has a reputation for exploiting contractors and failing to settle debts, causing severe financial hardships for those working with the company.
In response to Conoil’s alleged misconduct, Eastline Energy Resources has decided to join a group of aggrieved foreign and local contractors in filing a class action lawsuit against Conoil in the United States District Court, Southern District of New York. The decision to pursue legal action in the US stems from concerns that Conoil manipulates the Nigerian legal system to impede justice when facing lawsuits.
Eastline Energy Resources expressed confidence that the lawsuit in the United States would deliver the justice it deserves, citing a previous case where oil trading firm Vitol took Conoil to court in the United Kingdom in 2009 and emerged victorious. The company also called for a comprehensive government review of Conoil and its non-producing assets, emphasizing that certain assets held by Conoil for years have not contributed to oil or gas production.
The letter specifically mentioned the OML 136 asset, which Conoil has possessed since 1991 without any production, and the OML 150 asset awarded in 2007, which has also failed to produce hydrocarbons and has been subject to mismanagement and community attacks. Additionally, it highlighted OML 153, awarded in 2007, which remains non-productive, resulting in revenue loss for the Nigerian state. The letter also drew attention to OPL 257, awarded decades ago, that has not been converted to an OML despite its proximity to the TotalEnergies-operated Egina field.
In addition to the debt dispute and the call for asset review, Eastline Energy Resources criticized the leadership of Conoil, alleging that it lacked focus, engaged in nefarious activities, and was ill-prepared to handle challenges. The letter further revealed the involvement of Jeffrey Tesler, a former lawyer and convicted felon, as a shadow director and advisor at Conoil for several years. Tesler had been sentenced to 21 months in a US prison for his participation in a $150 million bribery scandal.
Eastline Energy Resources emphasized the need for a thorough clean-up of the oil and gas sector, with Conoil being a key focus of this endeavor. The company firmly stated that no organization is above the law, and punitive measures must be taken against unjust actions. The letter served as a precursor to the class action lawsuit to be filed against Conoil in the United States District Court in New York.